Policy measures at the EU level may be necessary to correct imbalances and weaknesses in the music streaming economy, concludes a new and comprehensive study commissioned by GESAC, the Brussels-based voice of collective management organisations. “It is necessary to strengthen the position of composers and songwriters in the streaming economy,” says Inger Elise Mey, Director of Online Media at TONO.
/ 29/09/2022 / Willy MartinsenComposers, songwriters and their collective management companies form the basis of what streaming services offer to music listeners, but despite strong growth in the streaming economy, much needs to be done before rights holders are fairly compensated.
The report «Study on the place and role of authors and composers in the European music streaming market”, was launched during a press conference in Brussels yesterday.
The research was conducted by music industry analyst and journalist Emmanuel Legrand on behalf of GESAC. The report is based on existing market analyses and surveys, and in-depth interviews with leading figures in music technology companies, music creators and other parts of the music industry.
The study identifies and analyzes the main reasons why the growing streaming market is failing to generate sufficient revenue for music creators, and what dynamics are preventing them from achieving more sustainable growth and position in the market, as well as what solutions can be used to address these.
“We can no longer accept an economic model that, despite an exponential increase in users and offerings, is unable to adequately compensate creators. Overall revenues must be increased and we must address the systemic imbalances and dysfunctions in digital online services so that composers and songwriters can benefit more from the progress of this growing market,” says Gernot Graninger, President of GESAC and CEO of TONO’s Austrian sister society AKM and AustroMechana.
Music streaming has become the dominant way to consume music. The services have 524 million subscribers, and their enormous growth has been possible because of the value that composers and lyricists and their collective management companies add to the services – without being fairly compensated.
The report says that streaming services take around 30 percent of the revenue, record labels and performers get around 55 percent, while only about 15 percent goes to composers, lyricists and music publishers. Prices have largely remained unchanged since 2006, and are therefore in practice lower today due to inflation. At the same time, the services offer discounted family solutions and free subscriptions with advertising. The result is that the value of music has become lower. The report believes that the time is ripe to look at other pricing models.
– It is important for TONO that those who write the music and lyrics get their rightful share of the streaming economy. Many people wonder whether those who compose the music and write the lyrics should not have a larger share of the streaming services' revenues. TONO believes that the willingness to pay for music is greater than what users pay today, and that streaming services should consider other subscription models where, for example, you pay more if you stream a lot, says Inger Elise Mey, who is the director of Online Media at TONO, and who also represents TONO in Gesac's "Legal Expert Group"..
It also points to challenges such as the fact that streaming creates few winners and many losers. 93 percent of artists have fewer than 1000 plays and approximately 57,000 artists – out of a total of 8 million – accounted for 90 percent of the music streamed in March 2020. Algorithms and the most popular playlists are bottlenecks that cement this pattern, and increased transparency around algorithms is required and cultural diversity (genre, language, country of origin of the music, etc.) must be promoted. Political measures at the EU level may be necessary to ensure this.
“It is time for the digital music market to become more balanced and sustainable. Those who create the music that is at the heart of the services must get their fair share. It is the music creators and their collective management societies that enable streaming services to offer users access to a massive catalogue of music in a streamlined and user-friendly way. However, they fail to meet the expectations of music creators in terms of financial compensation and recognition. This study provides European policymakers with valuable insights into the market. It also provides a constructive approach towards a more creator-friendly and culturally diverse ecosystem in music streaming,” says Véronique Desbrosses, CEO of GESAC.
The study also points to the need for better attribution, better data quality, linking recording codes (ISRC) and work codes (ISWC) in services, and a stronger obligation to report – especially on user-generated social media platforms.
You can read the full survey, a document showing key conclusions and a question and answer document on GESAC's website: https://authorsocieties.eu/the-place-and-role-of-authors-and-composers-in-the-european-music-streaming-market/#more-66028
GESAC represents 32 collective management societies in the EU, Iceland, Norway and Switzerland. The organization defends and promotes the rights of more than 1 million creators and rightholders in the fields of music, audiovisual works, visual arts and literary and dramatic works. Website: www.authorsocieties.eu
TONO was founded in 1928 and is a non-profit cooperative owned and managed by authors (composers and lyricists) and music publishers, and on their behalf manages the economic copyrights in the music they have created. TONO grants permission for the use of protected music, for example on radio, TV, the internet, concerts and cinemas for a fee, and transfers its financial results each year to the rights holders in music that has been played publicly. TONO has more than 37,000 members in Norway, but also works for millions of authors and music publishers from around the world. TONO gives music creators an economic basis to create new music, and collects and simplifies the licensing of protected music to music users. TONO had a turnover of NOK 843,9 million in 2021.
Willy Martinsen, Communications Director at TONO, willy.martinsen@tono.no, mobile 909 65 254
Véronique Desbrosses – general manager of GESAC, Veronique.Desbrosses@gesac.org, +32 2 511 44 54